A 58-year-old couple are considering opening a business of their own. They will either purchase an established Gift and Card Shoppe or open a new Video Rental Palace. The Gift Shoppe has a continuous income stream with an annual rate of flow at time t given by (dollars per year) and the Video Palace has a continuous income stream with a projected annual rate of flow at time t given by (dollars per year). The initial investment is the same for both businesses, and money is worth 10% compounded continuously. Find the present value of the Video Palace over the next 8 years (until the couple reach age 66). Round your answer to the nearest dollar.
A) $222,961
B) $220,268
C) $202,618
D) $237,342
E) $181,863

Question

A 58-year-old couple are considering opening a business of their own. They will either purchase an established Gift and Card Shoppe or open a new Video Rental Palace. The Gift Shoppe has a continuous income stream with an annual rate of flow at time t given by  (dollars per year) and the Video Palace has a continuous income stream with a projected annual rate of flow at time t given by  (dollars per year). The initial investment is the same for both businesses, and money is worth 10% compounded continuously. Find the present value of the Video Palace over the next 8 years (until the couple reach age 66). Round your answer to the nearest dollar. ​
A) $222,961 
B) $220,268 
C) $202,618 
D) $237,342 
E) $181,863

Quizplus · Accepted Answer

The Answer of A 58-year-old couple are considering opening a business of their own. They will either purchase an established Gift and Card Shoppe or open a new Video Rental Palace. The Gift Shoppe has a continuous income stream with an annual rate of flow at time t given by  (dollars per year) and the Video Palace has a continuous income stream with a projected annual rate of flow at time t given by  (dollars per year). The initial investment is the same for both businesses, and money is worth 10% compounded continuously. Find the present value of the Video Palace over the next 8 years (until the couple reach age 66). Round your answer to the nearest dollar. ​
A) $222,961 
B) $220,268 
C) $202,618 
D) $237,342 
E) $181,863

A 58-Year-Old Couple Are Considering Opening a Business of Their